oxford technology...oxford technology venture capital trust plc investment portfolio as usual, the...

Oxford TechnologyVenture Capital Trust plc

Financial StatementsFor the year ended 28 February 2010

Oxford Technology Venture Capital Trust plc

ContentsStatement on behalf of the Board 1

Table of investments 2

Board of Directors 3

Report of the Directors 4

Directors’ responsibilities for the financial statements 6

Directors’ remuneration report 6

Report of the independent auditors 8

Principal accounting policies 9

Profit and loss account 11

Balance sheet 12

Cash flow statement 13

Notes to the financial statements 13

Notice of AGM 18

Form of proxy 19

Financial highlights

Year ended Year ended 28 February 2010 28 February 2009 Net assets at year end £2.17m £1.80m

Net asset value per share at year end after distributions 41p 36p

Cumulative dividend (gross) from incorporation 32.7p 32.7p

Share price at year end 19p 13p

Earnings per share (basic & diluted) 5.3p (4.2)p


Investment Portfolio

As usual, the news is mixed with some companies doing reasonably well but with others having problems of one sort or another. On 1 March 2010, so just too late to be included in the accounts, OT1 received £834,000 for the sale of the shareholding in Membrane Extraction Technology (MET). OT1 was the first external investor in this company, a spin out from Imperial College, and invested £160,000 in December 1998. In February 2007, OT1 invested a further £50,000, along with £75,000 each from OT2 and OT3.

MET was founded by Andrew Livingston, a professor of chemical engineering, and the company sought to develop methods for using special-purpose membranes to improve the separation process, for example to extract the desired compound from a mix of reaction products. The membranes made by others proved unsatisfactory in some circumstances, and in 2006, MET began designing and manufacturing its own membranes. These are now being used, so far at lab or pilot production scale, by many pharmaceutical companies. On 1 March the whole company was purchased by a German chemical company Evonik, which also has an interest in special purpose membranes, and which also manufactures some of the polymers which are the raw material for certain membranes. Evonik’s larger scale membrane production plant is currently being installed at MET’s factory.

Following the sale of MET, as announced today, the Board resolved to pay a dividend of 10p to shareholders of record on 18 June 2010. The dividend will be paid on or around 16 July 2010.

OT1 owns a significant shareholding, currently 33%, in Select Technology Ltd. Since 2005, Select has been working very closely with Ricoh, the world’s leading manufacturer of MFDs (Multi-Function Devices, formerly known as photocopiers, but which now do many other things as well, such as scanning, emailing, faxing and printing.) Ricoh sells over 1m MFDs per year. Increasingly, as with computers 30 years ago, what persuades a customer to buy one model rather than another is not the hardware, but the software which runs on the hardware, such as software to allocate the costs of using the MFDs on a global network to the appropriate departments. Ricoh are not themselves experts in this software. Select has developed software modules, now known as the m3i platform which can be embedded with Ricoh’s operating system, and which transmits data about the state of affairs within the MFD to external software and which enables external software to control the MFD. So m3i acts as a bridge between Ricoh MFDs and external software.

M3i enables a multitude of applications. For example, the Access Module enables a visually impaired user to operate the MFD from their own PDA or laptop using a screen with large writing tailored to their own particular needs. Ricoh gave Access Module its “Innovative product of the year” award in September 2007. But the delays have been agonising and it was not until January 2010 that Ricoh finally launched the Access module in the US. Since then there have been three sample sales to US Government Departments and the Access Module is now likely to be included in future tenders to US Government departments. It enables Ricoh to comply with disability legislation.

Other modules of the m3i platform were launched in April and it will not be until late summer that the full suite is live globally. Select receives £80 - £350 for each sale, depending on how many modules of the m3i platform are used, and a sale is made by a dealer simply downloading a licence key from the Ricoh intranet website. So future success will depend on what percentage of future Ricoh MFDs use modules from the m3i platform. There are some encouraging signs, but the next year will be critical.

In late March, also since the date of these accounts, Scancell closed a £2.5m funding round, in which OT1 invested £75,000. Following the round, OT1 holds 5.2% of the equity. The investment included a number of new investors as well as existing shareholders of the company, and will enable Scancell to complete Phase 1/2a clinical trials of its first product, a DNA cancer vaccine against melanoma.

While other companies in the portfolio continue to trade, the best prospects of a good return for shareholders reside in Select and Scancell.

Investment Policy & Fundraising

The Company has built a balanced portfolio of investments with the following characteristics:• unlisted, UK based, science, technology and engineering businesses• investments typically in the range of £100,000 to £500,000• generally located within approximately 60 miles of Oxford

After the year end, the company raised equity by the issue and allotment of ordinary shares of 10 pence each

Statement on behalf of the Board

1


Table of investments held by company Company Description Date of

initial investment

Net cost of investment £’000

Carrying value at 28/02/10 £’000

Change in value for the year £’000

% equity held by OTVCT

% equity held byother OT Funds

Getmapping Aerial photography Mar 1999 518 74 0 4.4 -

Freehand Surgical Medical robots Jun 1998 494 157 (108) 0.7 1.7

Select Technology Photocopierinterfaces

Sep 1999 466 478 33 33.4 16.5

Scancell Antibody based cancer therapeutics

Aug 1999 342 320 3 6.3 2.6

OST Sensors for car production lines

Feb 1999 336 9 0 1.8 2.8

MET Membranes to improve separation

Dec 1998 210 817 509 20.6 9.8

Dataflow Accountancy software

Mar 1998 156 92 (10) 9.0 18.5

IMPT Industrial ceramic coatings

Mar 2000 150 38 (25) 6.3 -

DHA Ltd Radiotherapy products

Sep 1999 150 48 3 26.9 1.2

Equitalk/X-Fone Internet telecoms Jan 2000 136 11 2 < 0.1 < 0.1

Biocote Bactericidal powder coating

Dec 1997 120 7 0 4.3 -

Totals 3,078 2,051

Other Net Assets 118

NET ASSETS 2,169

John Jackson - Chairman7 June 2010

2

(“Shares”). 130,580 Shares were allotted at 41 pence on 1 April 2010. An aggregate of 14,097 of these Shares were allotted to Directors. A further 10,000 Shares were allotted at the same price on 26 April 2010. None of these Shares were allotted to Directors. The issue of these Shares is a post balance sheet event and is not reflected in the Net Asset Value figures. This will enable the company to offer modest support to investee companies in their additional fundraising rounds.

Results for the yearInterest on bank deposits and investee loans produced gross income of £5,000 (2009: £23,000) in the year. The profit for the year was £280,000 (2009: loss of £214,000) and earnings per share for the year showed a gain of 5.3p (2009: (4.2p)). The graph on page 7 shows the historical Net Current Assets and other investments per share. Together, these two figures make up the total Net Asset Value per share. The graph also shows cumulative dividends paid to date.

AGMShareholders should note that the AGM for Oxford Technology VCT will be held on Thursday 15th July 2010, at the Magdalen Centre, Oxford Science Park, starting at 12.00 noon and will include presentations by some of the companies in which the Oxford Technology VCTs have invested. A formal Notice of AGM has been included at the back of these Accounts together with a Form of Proxy for those not attending.


Board of Directors

3

John Jackson, age 80, ChairmanJohn worked full time for Philips Electrical Limited and Philips Electronic and Associated Industries Limited in the UK from 1952 to 1980, becoming a director of Philips Electronics in 1966, on whose board he served until early 1994. Since 1980, he has joined the boards of a number of other companies in a wide range of industries, including electronics, engineering, biotechnology, pharmaceuticals and fine chemicals. He is currently chairman of each of the four OTVCTs, as well as non-solicitor Chairman of Mishcon de Reya and Chairman of Instore Ltd in addition to a number of unlisted companies. He was the special adviser to the Korda Seed Capital Fund which was established as a £5m fund to invest primarily in technology-based companies, from March 1989 until its final distribution and cessation in 2003. He is particularly interested in high technology business start-ups. John Jackson is also an investor in Scancell, Freehand Surgical, OST and Select Technology from the OT1 portfolio.

Lucius Cary OBE, age 63, DirectorLucius is the founder and managing director of Oxford Technology Management Ltd (OTM), which has specialised in making and managing investments in start-up technology-based businesses since 1983. He has a degree in engineering and economics from Oxford University, an MBA from Harvard Business School and was an engineering apprentice at the Atomic Energy Research Establishment, Harwell. After forming and raising finance for his first business in 1972, he founded “Venture Capital Report” in 1978 and was its managing director for 17 years. In March 1996, he sold all his shares and became chairman so reducing his day-to-day involvement in order to concentrate more fully on OTM’s investment activities. By 2005, OTM had managed or advised ten seed capital funds, including the Oxford Technology VCTs which, between them, have made some 100 investments in early stage and start-up technology companies. In 2003, he was awarded an OBE for services to business and in 2004 was awarded the Judges Award at Investors Allstars, for his contribution over many years to early stage investing. Lucius Cary is an investor in Select Technology and Getmapping from the OT1 portfolio.

Michael O’Regan OBE, age 62, DirectorMichael was co-founder in 1973 of Research Machines Limited which floated on the London Stock Exchange as RM plc in 1994; he was an executive director until 1992 and then a non-executive director until 2004. RM plc is the UK’s leading supplier of ICT and other services to education. He is a non-executive director of several unlisted companies and has been involved in the start-up and early stage financing of a number of technology based companies. He is chairman of Hamilton Trust, an educational charity, is joint director of the Hamilton Maths and Reading Projects and is a founder trustee of Peers Early Education Partnership (PEEP). Michael O’Regan is an investor in OST from the OT1 portfolio.

Richard Vessey, age 61, DirectorRichard joined the Board of Oxford Technology Venture Capital Trust on 13 July 2006. His education is as a chemical engineer from Imperial College and MBA from Harvard, and his early career was in manufacturing companies, becoming Sales and Marketing Director of Plastic Engineers Ltd. In 1984 he left the conventional career path and founded Bell Plastics Ltd, a specialist plastics manufacturing business which was sold in 2004 to a private equity fund, of which he is currently a director, and which is building a portfolio of niche plastic companies. Richard is now Chairman of OST, an OT investee company and is also an active member of the UK Shareholders Association. Richard Vessey is also an investor in Getmapping, Equitalk, Freehand Surgical and Select Technology from the OT1 portfolio.

Conflicts of InterestThe Board has always considered carefully all cases of possible conflicts of interest, as and when they arise. For example, every time one of the OTVCTs makes an investment in which another OTVCT is an investor, there is a potential conflict of interest. The general policy is that there is complete transparency and all interests in every situation are declared and known to all, so that practical and sensible decisions can be taken. The Board believes that this policy has worked well in practice. However, in order to address the question with slightly more formality and, importantly, without adding to costs, it has been decided to designate one director of each of the four OTVCTs as the “Senior Independent Director”. This director will need to give his consent for each investment decision of that VCT where a possible conflict of interest arises. If the Senior Independent Director is unable to do so because he is himself conflicted, all the other directors of the OTVCT concerned without personal conflicts must give their unanimous agreement to the investment. The Senior Independent Director for OT1 will be John Jackson.


The directors present their report together with financial statements for the year ended 28 February 2010.

Principal activityThe company commenced business in March 1997. The company provides investment in start-up and early stage technology companies in general located within 60 miles of Oxford.

Business reviewThere was a net profit for the period after taxation amounting to £280,000 (2009: loss of £214,000). The profit and loss account comprises income of £5,000 (2009: £23,000) plus unrealised gains on fair value of investments of £349,000 (2009: loss of £167,000) less management and other expenses of £60,000 (2009: £70,000).

DirectorsThe present membership of the board, and their beneficial interests in the ordinary shares of the company at 28 February 2010 and at 28 February 2009, are set out below:Name 2010 2009J B H Jackson 49,000 44,000R Vessey 232,500 220,000J L A Cary 68,200 68,200M R H J O’Regan 230,000 230,000

Except as disclosed in notes 2 & 3 and set out below, no director had, during the period or at the end of the period, a material interest in any contract which was significant in relation to the company’s business.

Corporate governanceThe company has complied throughout the period with the provisions in Section 1 of the Combined Code on Corporate Governance (the “Code”), except that the Board as a whole performs the functions of both the Audit Committee (Code B.2.1) and the Nomination Committee (Code A.3.3). The Directors do not have formalised service contracts with the company, whereas the recommendation is for fixed term renewable contracts.

The Board confirms that procedures to implement the Turnbull guidance were in place throughout the year ended 28 February 2010. The Board acknowledges that it is responsible for the Company’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Board will now consist of four non-executive directors. JLA Cary represents the Investment Manager and the remaining three directors are independent. The Senior Independent Director for OT1 will be John Jackson whose duties are described in the paragraph on the preceding page under Conflicts of Interest. The Board has put in place corporate governance arrangements which it believes are appropriate to a Venture Capital Trust and which will enable the company to operate within the spirit of the Code.

The Board meets regularly, at least four times a year and between these meetings maintains contact with the Investment Manager. The Investment Manager prepares a written report on the performance of the fund in advance of Board meetings and this is circulated to all members of the Board. In addition, the directors are free to seek any further information they consider necessary. All directors have access to the Company Secretary and independent professionals at the Company’s expense. The Code states that the Board should have a formal schedule of matters specifically reserved to it for decision, to ensure that the direction and control of the company is firmly in its hands. This is achieved by a management agreement between the company and its Investment Manager which sets out the matters over which the Investment Manager has authority and the limits above which Board approval must be sought. All other matters are reserved for the approval of the Board. The Board ensures the independence and objectivity of the external auditors. This includes reviewing the nature and extent of non-audit services supplied by the external auditors to the company, seeking to balance objectivity and value for money. None of the directors has a service contract with the company. The Articles of Association require that one third of the directors (or the number nearest one third) on a rotation basis will be subject to re-election procedures at subsequent Annual General Meetings.

Key Performance IndicatorsThe Board consistently monitors the key performance indicators applicable to the business of the company and in particular reviews the performance of investee companies as appropriate.

Report of the Directors

4


Financial Risk Management Objectives and PoliciesThe company’s principal financial instrument comprises funds held at bank or on deposit. The main purpose of these funds is to enable the company to make further investments and to provide continued working capital. Due to the nature of financial instruments used by the company there is no exposure to price risk. The Directors’ approach to managing other risks applicable to the financial instruments concerned is shown below.

In respect of bank balances the liquidity risks are managed by maintaining a balance between the continuity of funding and maximising investment income. The company makes use of money market facilities where funds are available.

Internal controlThe directors are responsible for the company’s system of internal control. The Board has adopted an internal operating and strategy document for the company. This includes procedures for the selection and approval of investments, the functions of the Investment Manager and exit and dividend strategies. Day to day operations are delegated under agreements with the Investment Manager who has established clearly defined policies and standards. These include procedures for the monitoring and safeguarding of the company’s investments and regular reconciliation of investment holdings. This system of internal control, which includes procedures such as physical controls, segregation of duties, authorisation limits and comprehensive financial reporting to the Board, is designed to provide reasonable, but not absolute, assurance against material misstatement or loss.

The Board has considered the need for an internal audit function but has decided that the size of the company does not justify it at present. However, it will keep the decision under annual review. The Board has reviewed, with its Investment Manager, the operation and effectiveness of the company’s system of internal control for the financial period and the period up to the date of approval of the financial statements. The Board has continued to prepare the financial statements in accordance with UK Financial Reporting Standards rather than International Financial Reporting Standards. This is permitted as the financial statements present the results of an individual company rather than a group.

Statement as to Disclosure of Information to AuditorsSo far as the directors are aware, there is no relevant audit information (as described in Section 418 of the Companies Act 2006) of which the company’s auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

Relations with shareholdersThe company values the views of its shareholders and recognises their interest in the company’s strategy and performance, Board membership and quality of management. The company’s website provides information on all of the company’s investments, as well as other information of relevance to shareholders (www.oxfordtechnology.com).

Going concernAfter making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. For this reason they have adopted the going concern basis in preparing the financial statements.

Substantial shareholdersAt 28 February 2010, the company has been notified of four investors whose interest exceeds three percent of the company’s issued share capital (C Laing, 3.8%; R Vessey, 4.2%; M R H J O’Regan 4.3%). The company has several investors, all individuals, who with their families have invested £100,000 or more in the shares of the company.

Policy for Payment of CreditorsThe company’s policy is to pay creditors within the normal terms of the invoice, which usually means immediately.

AuditorsJames Cowper LLP offer themselves for reappointment in accordance with Section 489 of the Companies Act 2006. On behalf of the Board - JLA Cary

7 June 20105


Company law in the UK requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;• make judgments and estimates that are reasonable and prudent;• state whether applicable accounting standards have been followed, subject to any material departures

disclosed and explained in the financial statements;• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the

company will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the entity and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for ensuring that the directors’ report and other information included in the annual report is prepared in accordance with company law in the United Kingdom. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Services Authority.

The maintenance and integrity of the web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the information contained in the financial statements since they were initially presented on the web site.

Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions.

The Board has prepared this report in accordance with the requirements of Schedule 7A to the Companies Act 2006. An ordinary resolution for the approval of this report will be put to the members at the forthcoming Annual General Meeting. The law requires the company’s auditors to audit certain of the disclosures provided. Where disclosures have been audited, they are indicated as such.

Directors’ fees and the company’s policy on such feesThe Board consists solely of four non-executive directors. JLA Cary represents the Investment Manager and the remaining three directors are independent. Since the company is a Venture Capital Trust with no executive directors, there are certain relaxations of the Code permitted to the company under the Listing Rules of the Financial Services Authority. Accordingly, there is no separate remuneration committee and the Board performs collectively the duties of the committee. The Board’s policy is that the remuneration of non-executive Directors should be sufficient to reflect the duties and responsibilities of the Directors and the amount of time committed to the company’s affairs. The Articles of Association of the company state that no Director can be paid more than £50,000 without an ordinary resolution of the shareholders.

The company’s investment manager is Oxford Technology Management Ltd, a company of which JLA Cary is a director and the controlling shareholder. The Investment Management fee is laid out in the prospectus dated 10 March 1997 and the fee payments for the years ended 28 February 2010 and 28 February 2009 are laid out in note 2 to the financial statements.

As detailed in the company prospectuses dated 10 March 1997 and 3 March 1998 and in the more recent Investment Memorandums, once investors have received a return of 125% of the gross sums invested by way of dividends and capital distributions, a performance incentive fee (expressed as a percentage of all distributions thereafter) will be payable as to 13 per cent of such distributions to the Investment Manager collectively and 6 per cent of such distributions to the directors collectively and 1 per cent of such distributions to John Siddall & Son Ltd, the sponsor to the initial offer in 1997.

Directors’ responsibilities for the financial statements

Directors’ remuneration report

6


Directors’ rights of tenureNo director has a service contract with the company. At each AGM, one-third of the directors are obliged to retire by rotation though any such director can, if he wishes, offer himself for re-election by shareholders. At the AGM for the current year, Michael O’Regan and Richard Vessey will retire and offer themselves for re-election. There is no notice period and no provision for compensation upon early termination of the appointment of any director.

Company’s performance compared to a suitable indexThe Board is responsible for the company’s investment strategy and performance, although the creation, management and monitoring of the investment portfolio is delegated to the Investment Manager, as described in the prospectus dated 10 March 1997.

The graph below compares the performance of the company with the performance of the FTSE All-Share index over the period from 28 February 1997 to 28 February 2010. It shows the change over the period in the total return to ordinary shareholders (assuming all dividends are reinvested) compared to the change over the period in total shareholder return on a notional investment of the same composition as the FTSE All-Share Index.

This index was chosen as it represents a comparable broad equity market index. The net asset value per share (NAV) of the company has been selected as the most appropriate performance measure, as this best reflects progress of the investments made by the company; shareholders will ultimately realise value on disposal of these investments. All measures are rebased to 100 at the start date of the period. An explanation of the performance of the company is given in the Statement on behalf of the Board.

Directors’ emoluments for the yearThe information in this part of the report has been audited by the company’s auditors.

The Directors’ fees for the year were £3,000 (2009: £11,000):

2010 2009 £000 £000

JBH Jackson (Chairman) 0.9 3 JLA Cary 0.7 2 MRH O’Regan 0.7 2RC Vessey 0.7 2MF Wood (Retired) - 2 ______ ______ 3 11 ______ ______ The directors are not eligible for pension benefits, share options or other benefits.

On behalf of the BoardJohn Jackson - Chairman7 June 2010

7


Report of the independent auditors

8

We have audited the financial statements of Oxford Technology VCT Plc for the year ended 28 February 2010 which comprise the profit and loss account, balance sheet, cashflow statement, accounting policies and related notes. We have also audited the information set out in the Directors’ Remuneration Report that is described as having been audited. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Respective Responsibilities of Directors and Auditors As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an Auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Scope of the Audit of the Financial StatementsA description of the scope of an audit of financial statements is provided on the APB’s web-site at www.frc.org.uk/apb/scope/UKP.

Opinion on Financial Statements In our opinion the financial statements: • Give a true and fair view of the state of the company’s affairs as at 28 February 2010 and of its profit for the year then ended; • Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • Have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on Other Matters Prescribed by the Companies Act 2006In our opinion:• The part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006• The information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and• The information given in the Corporate Governance statement with respect to internal control and risk management systems and about share capital structures is consistent with the financial statements.

Matters on which we are Required to Report by ExceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • Adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or• the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or• Certain disclosures of director’s remuneration specified by law are not made; or • We have not received all the information and explanations we require for our audit.

Under the listing rules we are required to review:

• The information given in the Report of the Directors in relation to going concern • The part of the Corporate Governance statement relating to the Company’s compliance with the nine provisions of the June 2008 Combined Code specified for our review.

Mr Robert Holland (Senior Statutory Auditor) for and on behalf of JAMES COWPER LLP

Statutory Auditors - Oxford 7 June 2010


Basis of PreparationThe financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments. The financial statements have been prepared in accordance with applicable accounting standards and with the Statement of Recommended Practice ‘Financial statements of investment trust companies’ issued in 2009. The principal accounting policies of the company are set out below.

InvestmentsThe company invests in financial assets with a view to profiting from their total return through income and capital growth. These investments are managed and their performance is evaluated on a fair value basis. Accordingly as permitted by Financial Reporting Standard 26 (FRS 26) the investments are designated as fair value through profit and loss. Unrealised gains or losses on valuation are recognised through the profit and loss account.

Along with other investors the company signed the warranties which were associated with the sale of Valid Information Systems Limited. No claims under the warranties have been made and none are expected; no provision has therefore been made in the accounts.

Valuation of InvestmentsQuoted investments are stated at the bid price. Unquoted investments are stated at fair value, where fair value is estimated after following the guidelines laid down by the International Private Equity and Venture Capital Guidelines. The Directors’ policy is to initially state investments at cost and then to review the valuation every three months. The Directors’ may then apply an appropriate methodology which, as far as possible, draws on external, objective market data such as where fair value is indicated by:

• a material arms length transaction by a third party in the shares of the company, with discounting for more junior asset classes, and reviewed for impairment; or

• a suitable revenue or earnings multiple where the company is well established and generating maintainable profits. The multiple will be based on comparable listed companies but may be discounted to reflect a lack of marketability; or

• the net assets of the business.

Where such objective data is not available the Directors’ may choose to maintain the value of the company as previously stated or to discount this where indicated by underperformance against plan.

During the year ended 28 February 2006 the directors revoked the Investment Company status to enable distributions of capital profits to shareholders. Consequently the accounts have been prepared to include a statutory profit and loss account and a note of historical profits and losses in accordance with schedule 4 of the Companies Act 2006 and Financial Reporting Standard 3 (FRS 3).

The directors consider that this basis of valuation of unquoted investments is consistent with the International Private Equity and Venture Capital Guidelines.

TurnoverTurnover represents realised gains on the disposal of investments along with interest receivable on cash deposits. Dividends receivable on unquoted equity shares are brought into account when the company’s right to receive payment is established and there is no reasonable doubt that payment will be received. Dividends receivable on quoted equity shares are brought into account on the ex-dividend date.

Fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities and shares, provided there is no reasonable doubt that payment will be received in due course. Interest receivable from cash and short term deposits are accrued to the end of the year.

Principal accounting policies

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ExpensesAll expenses are accounted for on an accruals basis. All expenses are charged through the profit and loss account except as follows:

• those expenses which are incidental to the acquisition of an investment are included within the cost of the investment

• expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the investment.

Deferred TaxDeferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments because the company meets (and intends to continue for the forseeable future to meet) the conditions for approval as a Venture Capital Trust. The HMRC has approved the company as a Venture Capital Trust for the purpose of Section 247 of the Income and Corporation Taxes Act 2007. The approval was given in the financial period ended 28 February 1998 and the company has subsequently directed its affairs so as to enable it to continue to be so approved.

Earnings per ShareThe calculation of earnings per share for the period is based on the profit attributable to shareholders divided by the weighted average number of shares in issue during the period.

10


Profit and loss account

for the period ended 28 February 2010 Year ended 28 Year ended 28 February 2010 February 2009

Note £’000 £’000

(Loss) on disposal of investments held at fair value 1 (14) -

Unrealised (loss)/gain on fair valueof investments 7,11 349 (167)

Other income 1 5 23

Investment management fees 2 (28) (29)

Other expenses 3 (32) (41) ______ ______

(Loss)/profit on ordinary activities before tax 4 280 (214)

Taxation on (loss)/profit on ordinary activities 5 - - _____ _____

(Loss)/profit on ordinary activities after tax 280 (214)

==========

Earnings per share (basic and diluted) 6 5.3p (4.2)p ======= =======

The accompanying accounting policies and notes form an integral part of these financial statements

11

Historic cost profits and losses note 2010 2009 £’000 £’000

(Loss)/profit for the year 280 (214)

Unrealised loss/(gain) on fair value of investments (349) 167

Realisation of prior year’s net loss 14 -

Historical cost loss before tax (55) (47)

Historical cost loss after tax (55) (47)


The accompanying accounting policies and notes form an integral part of these financial statements

12

Balance sheet at 28 February 2010

28 February 2010 28 February 2009

Note £000 £000 £000 £000 Fixed assets Investments at fair value 7 2,051 1,658 Current assets Other debtors & prepayments 8 3 1Cash at bank 122 150 _____ _____ 125 151

Creditors: amounts falling 9 due within one year (7) (7) _____ _____ Net current assets 118 144

_____ _____Net assets 2,169 1,802 ===== =====

Capital and reserves Called up share capital 10 529 506

Share premium 11 135 71

Profit and loss account 11 1,149 1,377

Revalution reserve 11 356 (152)

_____ _____Shareholders’ funds 12 2,169 1,802 ===== =====Net asset value per share 41p 36p ===== =====

These financial statements were approved by the directors on 7 June 2010.

JLA CaryDirector7 June 2010


Cash flow statement for the period ended 28 February 2010

2010 2009

Note £000 £000 Net cash (outflow) from operating activities 13 (57) (43) Capital expenditure and financial investment Purchase of investments (58) (173) Disposal of investments - - ______ ______Net cash (outflow) from capital expenditure and financial investment (58) (173)

Net cash outflow before financing (115) (216)

Financing

Issue of Shares 92 97Expenses paid in connection with share issue (5) (5) ______ ______Net cash inflow from financing 87 92 ______ ______Dividends Paid - (252) ______ ______(Decrease) in cash (28) (376) ====== ======

Notes to the financial statementsfor the year ended 28 February 2010

2010 20091 Income £000 £000 Interest receivable 5 23 (Loss) on disposal of investments (14) - _____ _____ (9) 23 ===== =====

2 Investment Mangement Fees £000 £000 Investment management fee (see below) 28 26 Social security costs - 3 ____ _____ 28 29 ===== ===== Related Party disclosure - JLA Cary is a director of Oxford Technology Management Ltd and of Oxford Technology

Venture Capital Trust Plc. OTM is the Investment Manager to the company. During the year OTM charged management fees of £28,000. There were no employees during the year except for the directors.

13


14

3 Other expenses 2010 2009 £000 £000 Directors’ remuneration (see report on page 7) 3 11Social security costs - 1Auditors’ remuneration : audit services 5 5 : non-audit services 4 2Other expenses 20 22

____ ____

32 41

==== ==== 4 Operating Profit 2010 2009 £000 £000 The operating profit is stated after charging: Auditors’ remuneration - audit services 5 5 - non audit services 4 2 Directors’remuneration 3 11

_____ _____

12 18 ==========

5 Tax

No liability to UK corporation tax arose during the year. £000 £000

UK Corporation tax - - ===== =====

The tax charge for the year is different to the small profits rate of corporation taxation in the UK of 21.0% (2008: 20.9%). The differences are explained below:

£000 £000 (Loss) on ordinary activites before taxation (279) (214) ===== ===== At standard rate of taxation 58 (45) Costs not chargeable to corporation tax (58) 45 _____ _____ Current tax credit for year _ _

===== =====

Unrelieved management expenses of £782,731 (2009: £731,447) remain available for offset against future taxable profits.

6 Earnings per share

The calculation of earnings per share (basic and diluted) is based on the net profit for the financial period of £280,000 (2009: loss of £214,000) divided by the weighted average number of shares of 5,271,913 (2009: 5,043,779) in issue during the year. There are no potentially dilutive capital instruments in issue and therefore no diluted return per share figures are relevant. The basic and diluted earnings per share are therefore identical.


7 Investments 2010 2009

Cost £000 £000 As at 1 March 2009 3,304 3,131 Purchases at cost 58 173 Redeemed / disposed during the year (173) -

_____ _____

As at 28 February 2010 3,189 3,304 ===== =====

Revaluation As at 1 March 2009 (1,646) (1,479) Revaluation movement 508 (167) _____ _____ (1,138) (1,646) ===== ===== Net book value As at 1 March 2009 1,658 1,652 _____ _____ As at 28 February 2010 2,051 1,658 ===== =====

Details of unlisted investments in which OTVCT owns more than 20% are set out below with reference to their most recent published accounts. All companies are incorporated and operate in the UK.

Percentage Percentage of voting of voting Retained Name of Class of rights held rights held by Capital and profit/(loss) undertaking shares held by company other OT Funds reserves for year % % £000 £000 Select Technology1 Ordinary 33.4 16.5 (15) (141) DHA Ltd2 Ordinary 26.9 1.2 (19) 4

MET1 Ordinary 20.6 9.0 437 11 As shown above, certain of the company’s unlisted investments entitle the company to more than 20%

of the voting rights in the investee company. The Board does not consider that these investments fall within the definition of associated undertakings since the company does not exercise significant influence over the operating and financial policies of the investee companies.

Most recent published accounts: 1. For the year ended 31 July 2009. 2. For the year ended 31 December 2008.

8 Debtors 2010 2009 £000 £000 Prepayments and accrued income 3 1 ===== =====

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9 Creditors: amounts falling due within one year £000 £000

Other creditors 7 7 ===== =====

10 Share capital £000 £000 Authorised 10,000,000 ordinary shares of 10p each 1,000 1,000 500,000 redeemable preference shares of 10p each 50 50 _____ _____ 1,050 1,050 ===== ===== Allotted, called up and fully paid 5,291,075 (2009: 5,061,132) ordinary shares of 10p each 529 506 ===== =====

11 Reserves

Share Premium Revaluation Profit and account reserve loss account £000 £000 £000 At 1 March 2009 71 (152) 1,377

Profit for the period - - 280 Unrealised (losses)/gains - 349 (349) Issue of share capital 69 - - Cost of share issue (5) - -

Transfer between reserves - 159 (159) _____ _____ _____

As at 28 February 2010 135 356 1,149 ===== ===== =====

12 Reconciliation of movements in shareholders’ funds 2010 2009 £000 £000 Result for the period 280 (214) Issue of share capital 92 97 Cost of share issue (5) (5) Dividends paid - (252)

_____ _____ Net (decrease)/increase in shareholders’ funds 367 (374) Shareholders’ funds at beginning of year 1,802 2,176 _____ _____ Shareholders’ funds at end of year 2,169 1,802 ===== =====


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13 Reconciliation of net revenue before taxation to net cash outflow from operating activities 2010 2009 £000 £000

Operating (loss)/profit 280 (214) Increase in creditors - 3 (Increase)/decrease in debtors (2) 1

Unrealised loss/(gain) on investments (349) 167 Realised (gain) on investments 14 - _____ _____ Net cash outflow from operating activities for the year (57) (43) ===== =====

14 Financial instruments

Other than its investments in unquoted companies, the company has cash and a small amount of debtors and creditors through which it finances its activities. The risk faced by these instruments, such as interest rate risk or liquidity risk is considered to be minimal due to their nature. All of these are carried in the accounts at face value. There is no difference between these values and the fair values of the financial instruments.

15 Capital commitments

The company had no commitments at 28 February 2010 or 28 February 2009.

16 Contingent liabilities

Other than the warranty commitments entered into as part of the sale of Valid Information Systems Ltd. the company had no contingent liabilities at 28 February 2010 or 28 February 2009.

17 Post Balance Sheet Events

Aftertheyearend,theCompanyraisedequitybytheissueandallotmentofordinarysharesof10penceeach.130,580Shareswereallottedat41penceon1April2010.Anaggregateof14,097oftheseShareswereallottedtoDirectors.Afurther10,000Shareswereallottedatthesamepriceon26thApril2010.NoneoftheseShareswereallottedtoDirectors.TheissueoftheseSharesisapostbalancesheeteventandisnotreflectedintheNetAssetValuefigures.ThesefundswillenabletheCompanytooffermodestsupporttoitsinvesteecompaniesintheiradditionalfundraisingrounds.


Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of Oxford Technology Venture Capital Trust plc will be held at the Magdalen Centre, Oxford Science Park, Oxford OX4 4GA at 12.00 noon on Thursday 15 July 2010 for the following purposes:

To consider and, if thought fit, pass the following Resolutions:

(1) That the report and accounts for the period to 28 February 2010 be approved.

(2) That Mr Michael O’Regan who retires at the Annual General Meeting by rotation in accordance with Article 139 of the Company’s Articles of Association, be re-appointed as a Director.

(3) That Mr Richard Vessey, who retires at the Annual General Meeting by rotation in accordance with Article 139 of the Company’s Articles of Association, be re-appointed as a Director.

(4) That James Cowper LLP, Chartered Accountants, be re-appointed as Auditors and that the Directors be authorised to determine their remuneration.

(5) That the Directors’ remuneration report be approved.

(6) That the Company is generally and unconditionally authorised (pursuant to Article 23 of the Company’s Articles of Association) to make market purchases (within the meaning of s693(4) of the Companies Act 2006 (“the Act”) of ordinary shares of 10 pence each in the share capital of the Company (“Shares”) provided that:

(a) the maximum number of Shares hereby authorised to be purchased is 500,000 (representing approximately 9.6 per cent of the issued number of Shares),

(b) the minimum price which may be paid for a Share is 10 pence (which amount shall be exclusive of expenses); and

(c) the maximum price which may be paid for a Share is 110% of the latest published NAV per share (exclusive of expenses).

This authority shall expire at the Company’s annual general meeting in 2011. Pursuant to s701(6) of the Act, the Company may make contracts for the purchase of Shares which would or might be executed wholly or partly after the expiry of the time limit referred to above.

(7) That the Company continue in being as a Venture Capital Trust.

By Order of the BoardJames Gordon

Notes:(1) A member who is entitled to vote at this meeting is entitled to appoint one or more proxies to attend

and, on a poll, vote on his/her behalf. Such a proxy need not also be a member of the Company. To be valid, a proxy card must be lodged with the Company’s Registrar, Capita Registrars plc, c/o Oxford Technology VCT plc, Magdalen Centre, Oxford Science Park, Oxford OX4 4GA at least 48 hours before the meeting. A proxy card for use by members is attached. Completion of this proxy card will not prevent a member from attending the meeting and voting in person.

(2) No director has a contract of service with the Company.

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Oxford Technology Venture Capital Trust plcForm of Proxy

for the Annual General Meeting convenedfor 12.00 noon on Thursday 15 July 2010

I/We ................................................................................................................................(BLOCK LETTERS)

of ...................................................................................................................................

being a member of Oxford Technology Venture Capital Trust plc (“the Company”) hereby appoint the Chairman of the meeting or (note 2) ........................................................... as my proxy to vote for me/us on my/our behalf at the annual general meeting of the Company to be held on Thursday 15 July 2010 and at any adjournment thereof.

I/We direct my/our proxy to vote as follows in respect of the ordinary resolutions set out in notice of meeting (note 1):

Date this ......................................................day of..............................................., 2010

Signature................................................................................................................

Notes1. Please indicate how you wish your vote to be cast. If you do not indicate how you wish your proxy to

use your vote on any particular matter, the proxy will exercise his discretion both as to how he votes and as to whether or not he abstains from voting. The proxy will act as he thinks fit in relation to any other business arising from the meeting (including any resolution to adjourn the meeting).

2. If you prefer to appoint some other person or persons as your proxy, strike out the words “the Chairman of the Meeting or ”, and insert in the blank space the name or names preferred and initial the alteration. A proxy need not be a member of the Company.

3. The ‘Vote Withheld’ option is to enable you to abstain on any particular resolution. Such a vote is not a vote in law and will not be counted in the votes ‘For’ and ‘Against’ a resolution.

4. If the member is a corporation, this Form of Proxy must be executed either under its common seal or under the hand of an officer or attorney duly authorised in writing.

5. To be effective, this Form of Proxy must be completed, signed and must be lodged (together with any power of attorney or duly certified copy thereof under which this Form of Proxy is signed) with the Company’s registrars, Capita Registrars plc, c/o Oxford Technology Venture Capital Trust plc, Magdalen Centre, Oxford Science Park, Oxford OX4 4GA, not less than 48 hours before the time appointed for the meeting.

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Resolution No. For Against Withheld

1. Approval of accounts.

2. Re-appointment of Mr Michael O’Regan as Director.

3. Re-appointment of Mr Richard Vessey as Director.

4 Approval of the appointment of James Cowper LLP and authorisation of Directors to fix remuneration.

5. Approval of the Directors’ remuneration report.

6. Approval of authority to make purchases of own shares.

7. Company to continue as a Venture Capital Trust.

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Company Registration Number: 3276063

Company Information

Directors Investment Manager and John Jackson (Chairman) Registered Office Richard Vessey Oxford Technology Management Ltd Lucius Cary Magdalen Centre Michael O’Regan Oxford Science Park Oxford OX4 4GA Secretary Solicitors James Gordon Gordons Partnership LLP 22 Great James Street London WC1N 3ES Registrars Auditors & VCT Compliance Capita Registrars Advisers Northern House James Cowper LLP Woodsome Park Willow Court Fenay Bridge 7 West Way Huddersfield Botley, Oxford OX2 0JB West Yorkshire HD8 0LA

Brokers JP Morgan Cazenove 20 Moorgate London EC2R 6DA

oxford technology...oxford technology venture capital trust plc investment portfolio as usual, the...

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